12 Jan 2016
AUD/USD: lower end of range looks sticky - Westpac
FXStreet (Guatemala) - Rob Rennie, analyst at Westpac Banking Corporation explained that Global financial markets were jolted back to reality from the holiday slumber by events in China last week.
Key Quotes:
"I see these moves creating three sets of risks for the A$ - increased volatility; weaker commodity prices and reduced Asian central bank demand.
I think events in China have shifted AUD to a new 0.68 to 0.72 range but that the lower end of that range will remain sticky as equity related demand builds."
"AUD on crosses has also gotten to attractive levels e.g. AUD/NZD probing below 1.06 and AUD/JPY below 82. These are the kind of levels I would expect to start to see demand coming through.
All up I think events in China have shifted AUD to a new 0.68 to 0.72 range but that the lower end of that range will remain sticky as equity related demand builds. This flow will continue to frustrate the more bearish forecasters out there."
Key Quotes:
"I see these moves creating three sets of risks for the A$ - increased volatility; weaker commodity prices and reduced Asian central bank demand.
I think events in China have shifted AUD to a new 0.68 to 0.72 range but that the lower end of that range will remain sticky as equity related demand builds."
"AUD on crosses has also gotten to attractive levels e.g. AUD/NZD probing below 1.06 and AUD/JPY below 82. These are the kind of levels I would expect to start to see demand coming through.
All up I think events in China have shifted AUD to a new 0.68 to 0.72 range but that the lower end of that range will remain sticky as equity related demand builds. This flow will continue to frustrate the more bearish forecasters out there."